Difference between Set off and Counter claim ?
Kumar Krishan Agarwal Advocate
(Querist) 19 February 2010
This query is : Resolved
Dear Ld Counsel's,
What is the difference between these two terms ? When and where they are used as in Plaintiff and defendants suit ?
Parveen Kr. Aggarwal
(Expert) 20 February 2010
Provision about set-off has been made in Rules 6 and 7 of Order 8 of the Code of Civil Procedure, 1908 whereas provision for counter-claim has been made in Rules 6-A to 6-G and 7 of Order 8. The provisions are self-explanatory and the same are reproduced hereunder:
"6. Particulars of set-off to be given in written statement.
(1) Where in a suit for the recovery of money the defendant claims to set-off against the plaintiff's demand any ascertained sum of money legally recoverable by him from the plaintiff, not exceeding the pecuniary limits of the jurisdiction of the Court, and both parties fill the same character as they fill in the plaintiff's suit, the defendant may, at the first hearing of the suit, but not afterwards unless permitted by the Court, presents a written statement containing the particulars of the debt sought to be set-off.
(2) Effect of set-off—The written statement shall have the same effect as a plaint in a cross-suit so as to enable the Court to pronounce a final judgment in respect both of the original claim and of the set-off: but this shall not affect the lien, upon the amount decreed, of any pleader in respect of the costs payable to him under the decree.
(3) The rules relating to a written statement by a defendant apply to a written statement in answer to a claim of set-off.
(a) A bequeaths Rs. 2,000 to B and appoints C his executor and residuary legatee. B dies and D takes out administration to B's effect, C pays Rs. 1,000 as surety for D: then D sues C for the legacy. C cannot set-off the debt of Rs. 1,000 against the legacy, for neither C nor D fills the same character with respect to the legacy as they fill with respect to the payment of Rs. 1,000.
(b) A dies intestate and in debt to B, C takes out administration to A's effects and B buys part of the effects from C. In a suit for the purchase-money by C against B, the latter cannot set-off the debt against the price, for C fills two different characters, one as the vendor to B, in which he sues B, and the other as representative to A.
(c) A sues B on a bill of exchange. B alleges that A has wrongfully neglected to insure B's goods and is liable to him in compensation which he claims to set-off. The amount not being ascertained cannot be set-off.
(d) A sues B on a bill of exchange for Rs. 500. B holds a judgment against A for Rs. 1,000. The two claims being both definite, pecuniary demands may be set-off.
(e) A sues B for compensation on account of trespass. B holds a promissory note for Rs. 1,000 from A and claims to set-off that amount against any sum that A may recover in the suit. B may do so, for as soon as A recovers, both sums are definite pecuniary demands.
(f) A and B sue C for Rs. 1,000 C cannot set-off a debt due to him by A alone.
(g) A sues B and C for Rs. 1000. B cannot set-off a debt due to him alone by A.
(h) A owes the partnership firm of B and C Rs. 1,000 B dies, leaving C surviving. A sues C for a debt of Rs. 1,500 due in his separate character. C may set-off the debt of Rs. 1,000."
"6A. Counter-claim by defendant
(1) A defendant in a suit may, in addition to his right of pleading a set-off under rule 6, set up, by way of counter-claim against the claim of the plaintiff, any right or claim in respect of a cause of action accruing to the defendant against the plaintiff either before or after the filing of the suit but before the defendant has delivered his defence or before the time limited for delivering his defence has expired, whether such counter-claim is in the nature of a claim for damages or not:
Provided that such counter-claim shall not exceed the pecuniary limits of the jurisdiction of the Court.
(2) Such counter-claim shall have the same effect as a cross-suit so as to enable the Court to pronounce a final judgment in the same suit, both on the original claim and on the counter-claim.
(3) The plaintiff shall be at liberty to file a written statement in answer to the counter-claim of the defendant within such period as may be fixed by the Court.
(4) The counter-claim shall be treated as a plaint and governed by the rules applicable to plaints.
6B. Counter-claim to be stated
Where any defendant seeks to rely upon any ground as supporting a right of counter-claim, he shall, in his written statement, state specifically that he does so by way of counter-claim.
6C. Exclusion of counter-claim
Where a defendant sets up a counter-claim and the plaintiff contends that the claim thereby raised ought not to be disposed of by way of counter-claim but in an independent suit, the plaintiff may, at any time before issues are settled in relation to the counter-claim, apply to the Court for an order that such counter-claim may be excluded, and the Court may, on the hearing of such application make such order as it thinks fit.
6D. Effect of discontinuance of suit
If in any case in which the defendant sets up a counter-claim, the suit of the plaintiff is stayed, discontinued or dismissed, the counter-claim may nevertheless be proceeded with.
6E. Default of plaintiff to reply to counter-claim.
If the plaintiff makes default in putting in reply to the counter-claim made by the defendant, the Court may pronounce judgment against the plaintiff in relation to the counter-claim made against him or make such order in relation to the counter-claim as it thinks fit.
6F. Relief to defendant where counter-claim succeeds
Where in any suit a set-off or counter-claim is established as defence against the plaintiff's claim and any balance is found due to the plaintiff or the defendant, as the case may be, the Court may give judgment to the party ent'tled to such balance.
6G. Rules relating to written statement to apply
The rules relating to a written statement by a defendant shall apply to a written statement filed in answer to a counter-claim.
The aforesaid rules regarding counter-claim were inserted vide Act No. 104 of 1976 (w.e.f. 1-2-1977).
7. Defence or set-off founded upon separate grounds
Where the defendant relies upon several distinct grounds of defence or set-off or counter-claim founded separate and distinct facts, they shall be stated, as far as may be, separately and distinctly.
Raj Kumar Makkad
(Expert) 20 February 2010
Nothing requires addition in the reasoned reply of parveen.
Kumar Thadhani
(Expert) 22 February 2010
HATS-OFF TO MR PARVEEN ON THIS REPLY.
